- RBI announced premature redemption schedule for Sovereign Gold Bonds from July to Sept 2026
- Premature redemption allowed after five years on scheduled interest payment dates via original purchase point
- Redemption price based on average gold price from last three business days before redemption date
The Reserve Bank of India (RBI) has announced the premature redemption schedule for eligible Sovereign Gold Bond (SGB) tranches between July and September 2026, allowing investors to exit after completing the mandatory five-year holding period.
The window covers SGB series issued between 2019 and 2021. Premature redemption is allowed only after five years from the issue date and on scheduled interest payment dates. Investors must submit requests within the RBI-notified timelines through the bank, post office or authorised institution where the bonds were purchased.
The first redemption is for 2019-20 Series VIII on July 21, 2026, with requests accepted from June 20 to July 13. The last eligible tranche in this window is 2021-22 Series VI, redeemable on Sept. 7, 2026, with requests open from Aug. 7 to Aug. 28.
How Redemption Price Is Calculated
The RBI determines the redemption price based on the simple average of the closing price of 999 purity gold over the previous three business days, using rates published by the India Bullion and Jewellers Association (IBJA). The central bank announces the final redemption price ahead of each redemption date.
Apart from gains linked to gold prices, SGB investors receive 2.5% annual interest, paid semi-annually on the original investment amount throughout the tenure of the bond.
Recent Redemption Highlights Strong Returns
The premature redemption of SGB 2020-21 Series III illustrates the returns generated by rising gold prices. Issued at Rs 4,627 per gram for online subscribers and Rs 4,677 per gram for offline investors, the bond was redeemed at Rs 14,774 per gram on June 16, 2026.
This translated into an absolute return of around 219.3% for online subscribers, excluding the interest earned during the holding period. An investment of Rs 1 lakh at issuance would have grown to about Rs 3.19 lakh, in addition to the cumulative interest received.
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Should Investors Redeem?
Financial experts say the decision should depend on an investor's liquidity requirements, portfolio allocation and outlook on gold prices. Investors looking to book profits or meet funding needs may consider premature redemption, while those seeking long-term exposure to gold can continue holding the bonds until the original eight-year maturity.
Tax Rules Changed From April 1
From April 1, 2026, only investors who subscribe to Sovereign Gold Bonds during the RBI's primary issuance and hold them until maturity remain eligible for capital gains tax exemption. Investors purchasing SGBs from the secondary market will now be liable to pay applicable capital gains tax on redemption, reducing a key tax benefit previously available.
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